Critical Issues Facing IT Outsourcing Vendors in India

Global outsourcing of IT and IT enabled services (ITES) has now become an accepted corporate strategy of a vast majority of firms around the world. The functions being offshored have increased in scope and scale and have climbed the value chain ladder. However, the literature has overwhelmingly focused on client-centric issues to the neglect of vendor concerns. There is a rich tradition of ranking critical issues confronting information systems executives and some studies have even explored critical issues of outsourcing clients. These rankings have significant implications for both researchers and practitioners. Our study focuses on the nascent area of IT outsourcing vendors. We examine the issues from the standpoint of IT outsourcing vendors in India, primary destination for IT offshoring for over two decades. The results suggest that for the Indian vendors, the most critical issues are not related to cultural, language, and time zone differences as suggested in many writings. Rather, the most critical concerns are issues dealing with work arrangements and relationships with the client, and issues related to the client’s organizational readiness for offshoring. Clearly the understanding of such issues is important to the vendors, but also to the clients in order to maintain an effective dyadic relationship.